Swedish prime minister John Fredrik Reinfeldt arrives for a European Council meeting in Brussels, November 23, 2012 (The Council of the European Union)

Sweden’s prime minister John Fredrik Reinfeldt rejects the notion of closer economic and fiscal integration in Europe, a goal set out by German chancellor Angela Merkel in Davos, Switzerland earlier last week.

“The idea that we give new powers to Brussels and the European Commission then tells us what we can and cannot do, we categorically reject,” the Swedish leader, who belongs to the same conservative political family as Merkel, said in an interview with the German Handelsblatt that was published on Sunday.

Merkel had told the World Economic Forum in Davos on Thursday that a strengthening of fiscal coordination in Europe and improved competitiveness were necessary to revive growth. Labor laws and tax rates could be among the measures that are harmonized among European Union nations, something many, including those with stricter labor laws than Germany like France and Italy as well as countries with lax tax regimes like Ireland, would undoubtedly oppose.

Reinfeldt wondered whether such a harmonization of economic and fiscal policy would apply to all European Union member states or only the countries that are presently in the eurozone. Sweden is not. The premier said he was “willing to take such measures on a voluntary basis.” But a further centralization of powers in Brussels “Sweden rejects.”

The government in Stockholm previously rejected plans for closer political union which would have included the pooling of sovereign debt in the form of eurobonds and the erection of a continental banking union. Reinfeldt said last summer, “We have to ask ourselves: is this just a way to get access to our resources, or does it bring some value added to Sweden?” As is the case in many Northern European states, the Swedish public is uncomfortable with the perceived subsidization of weaker countries in the periphery of the bloc at their expense.

Last December, when eurozone countries pushed for a banking union despite the reluctance of members outside the single currency union, Sweden joined the Czech Republic and the United Kingdom in opting out of it.

Reinfeldt spoke favorably of British prime minister David Cameron’s announced referendum on the island nation’s European Union membership which is supposed to take place in 2017. “Perhaps this will stop those in Europe who want more and more centralization,” he suggested.

At the same time, Sweden wants the United Kingdom in the body, he said. “A EU without England would be very bad. London is one of our key allies on the issue of developing the internal market for Europe’s digital agenda and more free trade.”

Reinfeldt’s ruling Moderate Party has remained stable in the polls since the 2010 election but some of his centrist and liberal coalition partners have been losing ground. The Euroskeptic Center Party might not even make the 4 percent election threshold anymore while opposition Social Democrats and Greens get 47 percent of the votes in a survey this month — enough to give them a comfortable majority in parliament. Elections are expected to be called late next year.